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LR1 spot rates face fall in gasoil

LR1 spot rates face fall in gasoil
OWNERS of long range one product tankers trading on the spot market in the Middle East face a tougher month, with gasoil shipments to the Atlantic set to decline and fewer naphtha cargoes scheduled to be shipped to Asia.

LR1 spot rates face fall in gasoil cargoes to Atlantic.
OWNERS of long range one product tankers trading on the spot market in the Middle East face a tougher month, with gasoil shipments to the Atlantic set to decline and fewer naphtha cargoes scheduled to be shipped to Asia.

Gasoil cargoes have been unloaded from product tankers chartered for floating storage and sitting off ports in northwest Europe this month, brokers said. As a result, the number of LR1 product tankers available to load spot cargoes in the Middle East has risen at a time when chartering activity has slowed as Chinese traders break for New Year festivities.

?There are too many ships and not enough cargoes. It is not looking pretty out there,? a broker said about opportunities for the LR sector.

?Too much gasoil is stored in the West, so the gasoil arbitrage from East to West has shut. Traders that need to buy gasoil will buy it in the West, where there is so much in floating storage, instead of buying it in the East,? he said.

Spot rates for LR1s taking Middle East naphtha to Japan have fallen throughout this month to a three-month low of $7,500 per day.

?The market is overtonnaged into March, so there is not much light at the end of the tunnel for owners,? a London-based broker said

?With the Chinese New Year celebrations coming, we are not expecting to see many more cargoes coming out in February.?

?We are already seeing some March cargoes, but not nearly enough to soak up what tankers are out there,? he added.

The rate on the Baltic Exchange TC5 route, shipping 55,000 tonnes of naphtha from Saudi Arabia to Japan on LR1s, was W130, or $7,500 per day yesterday, down from W145, or $10,000 per day last week.

ICAP Shipping said charterers were trying to drive rates down, but owners were holding out for rates of W140.

According to Imarex Asia, there are 14 LR1s from a global fleet of 259 storing clean petroleum products on short-term charters and 55 LR2s from the 205-strong fleet. Five LR2 tankers were available to load cargoes at the end of this month and eight LR1s in the Middle East

The spot rate for LR2 tankers shipping Middle East naphtha to Japan also dropped from W145 at the end of January to W133 yesterday. An Imarex Asia broker said charterers were trying to push rates below W130.

The rate on the Baltic Exchange"s TC1 route, shipping 75,000 tonnes of Saudi Arabian naphtha to Japan, was W129 or $14,700 per day, yesterday.

The decline in LR spot rates also hit medium range tankers operating on the Middle East to Japan route.

Norwegian broker Fearnleys said the rate ?softened? from W180 at the start of this month to W170. But the MR Singapore to Japan rate ?was holding its ground at the W140 level?, said Fearnleys.

www.turkishmaritime.com.tr

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